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Independent.ie

Saturday 3 December 2016

To share milk or not to share: that is the question

A tough first season of demo farming hasn't shaken the ambitions of John Sexton as he remains positive about his future in the dairy sector

Published 18/05/2016 | 02:30

John Sexton moved in his 100 cow herd to the Gurteen farm owned by Shinagh Estates in January.
John Sexton moved in his 100 cow herd to the Gurteen farm owned by Shinagh Estates in January.
Travel to work in countries such as New Zealand is key to young people's career development.

To share milk or not to share milk. That's the question that is being posed in west Cork at the moment where the first demonstration farm based on a share-milking arrangement is now halfway into its first milking season.

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"It's been fairly tough going alright, with the way the weather and milk prices have gone so far this year," admits John Sexton, the 26-year-old that entered a three year agreement with Shinagh Estate - the property vehicle owned by the west Cork co-ops.

"I've committed to a minimum of three years, and I can't stay for more than seven years, but I hope to move on to a bigger operation as the next step on in fulfilling my dream of buying my own farm," says the Cork native.

While Sexton grew up on a farm at Donoughmore that milked cows, in more recent decades part of the 70ac fragmented holding was planted with forestry, and much of the land was leased out.

Undaunted, Sexton got an advanced certificate in Dairy Herd Management from Clonakilty college before taking a job on William Kingston's 220 cow set-up in Skibbereen.

"He was a great mentor and I learned an awful lot there," recalls Sexton.

This positive experience encouraged the Corkman to broaden his horizons, and in 2009 he embarked on the international leg of his dairy career by getting a flight to New Zealand.

"I was working as a labourer on a 650 cow herd with Alistair and Sharon Rayne for a year before I moved on to become an assistant manager at an 800 cow set-up.

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"From there I moved to England, about one hour south of Manchester, where I worked with a split-calving herd of 400 cows," he says.

Sexton ensured that he always worked for top operators, with his English boss Ed Dale managing a total of 2,000 cows across six different units.

"In New Zealand everything is run in a very business-like manner. I was tempted to stay longer but it was very far away from home.

"On the other hand, England wasn't that attractive to me for investing because things are so volatile there. UK processors want fresh milk all year round, so you have to operate split calving systems. But if you commit to producing milk in the winter, it becomes much more difficult to control costs," he says.

So on a trip back to Ireland last summer, he started looking around for positions, and heard that Shinagh Estates was looking for a share-milker to partner with at the 33ha Gurteen farm near Bandon. Three interviews later he'd landed the gig.

"It's a 60:40 profit share, in my favour. I've supplied all the cows, and they supplied all the infrastructure," explains Sexton.

While every effort was made to keep investment costs to the minimum - such as a second-hand 12 unit parlour - building costs still went €50,000 over the €160,000 budget due to time over-runs and planning permission requirements that forced a site change for the parlour and the erection of embankments.

Indeed, final costs are likely be even higher than this when the owners finally settle on a service charge payable to Cork County Council. Currently, the council is demanding a payment of €15,000 for the development.

The delays in the building added a further strain to the initial set-up period for John, with his cows starting to calve at the start of February before all the fencing and water-troughs had been fully installed.

"At one stage it was looking like I was going to end up hand-milking the first of the cows to calve, but thankfully we avoided that.

"But even then we couldn't sell the milk to the creamery because we didn't have plate coolers installed.

"It was no big deal since we could use all the early milk to feed the calves," says Sexton graciously.

He also says that the parlour is working well bar a bit of frothing on the milk.

More highly strung individuals might not have handled the situation as well, having just invested €130,000 in 100 cows, the majority of which was borrowed over seven years.

However, Sexton also credits the bank as being very understanding, with a capital repayment holiday granted to get him through what is one of the toughest years on record for dairying.

Initial projections were based on a base price of 30c/l, which if the cows were producing 350kg of milk solids per year, would equate to a common cost profit of €85,000 for the farm. But the pot is likely to be closer to €35,000 this year, leaving Sexton with close to €20,000 for his efforts this year.

Despite these challenges, and enduring a spring that saw him clock up 70- and 80-hour weeks, Sexton is positive about his future both on the farm and within the industry.

"It doesn't really matter where you're working in the world, the cow still has to be calved, and that's when the pressure comes on.

"Here I'm building equity [through the investment in cows]. It's not really about the cash. Maybe if I can move on to a 200-300 cow herd I will be able to earn more cash."

Fast facts

33ha farm near Bandon, Cork

100 cows calved; eight culled, died or aborted

Mostly crossbred, but some Holstein Friesian

Average cost €1,270/hd, purchased privately in December and January

Average EBI €183, €60 for milk, €89 for fertility

50pc first calvers, rest mostly second and third calvers

Daily routine 7.30am-6pm

325kg/cow of milk solids target for year one

Share-milking system with 60:40 split for sharemilker and farm owner

Opportunities for real career is dairy sector’s big issue

Darragh McCullough

John Sexton’s sense of progression is exactly what the parties involved in the demonstration farm — the west Cork co-ops, Teagasc, and AIB — all want to nurture in the Irish dairy industry.

While quotas and limits on production were perceived as the biggest differences between Ireland the dynamism of New Zealand’s dairy sector, there is a growing acceptance that providing a structure that allows young people — from both farming and non-farming backgrounds — a chance to progress up through the ranks is the biggest issue post-quota.

“This demo farm is designed to show both share-milkers and landowners that there is a win-win scenario if it is set up correctly,” said John McNamara.

He is the Teagasc advisor working with John Sexton at the Gurteen farm.

“This was effectively a farm with nothing bar a crush on site before we started.

“So everything has been costed in. Its scale at 100 cows is designed to prove that you don’t need a huge operation for everyone to get a decent share.

“We estimate that the  return on investment for the landowner after depreciation, interest, and the opportunity cost of renting out the land at €180/ac, is about 6pc,” says McNamara.

Successor

“Crucially, it also safe-guards the Basic Payments for the owner, but there are many other reasons why share-milking might appeal to a farmer in his 50s.

“Some just need to buy some time until the next generation takes over; others might enjoy the opportunity to mentor an enthusiastic successor.”

McNamara is also  quietly confident of the new sharemilker’s ability to succeed on the Gurteen farm.

“You can see that all the cows are calm around him, and he made a good job of assembling the herd by himself.

The real litmus test will be the next couple of weeks when he is trying to get the cows in calf. That will be the foundation stone for next year, but so far the submission rates look good.

“I also put a lot of emphasis on the somatic cell counts (SCC) in the herd this spring — not so much for the sake of SCC, but more so because of the huge impact that it can have on morale for the farmer. But at 88,000, we’re in good shape,” he says.

Sexton acknowledges that he put a massive amount of effort into controlling SCCs in the newly assembled herd.

“We made sure that none of the older cows with higher SCCs were allowed infect the herd.

“So I did California Milk Tests (CMTs) on every cow, and milked high count cows last, or cleaned the clusters afterwards,” he says.

Late spring was  serious first test  of young nerves

The late spring tested the most seasoned of farmers, so on the brand-new set up at Gurteen it was a serious first test of young Sexton’s nerve.

“Grass was on a knife-edge alright, but is turning around dramatically in the last week, with about 160kg/cow available at the moment,” says local advisor, John McNamara. Current growth rates are at 80kgDM/ha.

To get through the spring, Sexton fed 4kg of nuts to the cows up to mid-March, dropping to 2kg until the end of April, and now down at 1kg/hd.

“We didn’t have a lot of silage so we were really rationing it out. It was tough but it’s coming together nicely now,” he said.

The farm is heavily stocked with an average of three cows per hectare.

All the calves are moved off farm at two weeks, with the heifers going to Sexton’s home farm to be reared, while the Friesian bull calves were sold at three weeks in Bandon mart for an average of €100/hd.

The crossbred ones were collected from the farm and fetched anywhere from €5-10/hd.

One third of the farm is closed up now for silage, which Sexton hopes to cut in late May, followed by another cut in July or August.

He spread 2.5 bags of urea per acre,

followed by 1.5 bags of ASN (ammonium sulphate nitrate that contains 24pc nitrogen and 14pc sulphur).

From now on CAN will be used.

A contractor does all the spreading, with a whole farm approach up to now, but Sexton is hoping that he will be able to get into the routine of having the contractor in every three weeks. In this way  he hopes to get most of the spreading done behind the cows.

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